OPay Raises $50 Million for Digital Finance Business in Nigeria

OPay Raises $50 Million for Digital Finance Business in Nigeria

In November 2017, I wrote that “Opera wants to become the Internet for Africa with its bold vision of doing many things in its browser: media publishing, content aggregation, and financial services. It plans to invest … to deepen those services by turning Opera into an ecosystem of apps where many things can happen, at browser level”. It has since added logistics, food delivery and other elements in the strategy. If your browser can do payment, why waste time looking for an app or login for any other solution? The company wants to abstract most services at the level of its browser!

Opera is evolving as a platform with capabilities to abstract away most internet services at the level of its browser. That is a solid business model, and that is exciting. My thinking is that Opera will increasingly make it easier for the bulk of its customer base to do more on its platform, thereby saving them more money in visiting the main Internet. Technically, your Internet can end in Opera because it will allow you do most things there. Simply, Opera is transmuting as an aggregator.

This week, we are reading that OPay, the payment unit of the whole grand plan has raised $50 million from Sequoia China and others with specific focus in Nigeria. The template is digital finance business in Nigeria.

OPay, an Africa-focused mobile payments startup founded by Norwegian browser company Opera, has raised $50 million in funding. Lead investors include Sequoia China, IDG Capital  and Source Code Capital. Opera  also joined the round in the payments venture it created. OPay will use the capital (which wasn’t given a stage designation) primarily to grow its digital finance business in Nigeria — Africa’s most populous nation and largest economy.

OPay will also support Opera’s growing commercial network in Nigeria, which includes motorcycle ride-hail app ORide and OFood delivery service. Opera founded OPay in 2018 on the popularity of its internet search engine. Opera’s web-browser has ranked No. 2 in usage in Africa, after Chrome, the last four years.

But do not worry – this is an insider game: Opera wants to power all services Opera runs in Nigeria with its own payment solution. Those include the bike-sharing business (ORide), and food delivery business (OFood), executing a double play playbook. Everyone has its own payment element because everyone is looking how to reduce fees. Yet, that does not usually mean raising $50 million for just payment. OPay is a competition to Paga, Paystack, and Flutterwave because it has internal customers in ORide, OFood, etc that can help it reduce fees and still compete.

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6 thoughts on “OPay Raises $50 Million for Digital Finance Business in Nigeria

  1. Opera is really pushing hard, with some cash to burn.

    I do feel its road to profitability is still fuzzy, but being that a lot of users are already in its ecosystem; we wait to see how well they like all the things Opera is adding.

    By the time each platform has its own payment system, those whose main business is just payment platform may no longer have anyone transacting business on their platforms.

    Whoever survives the next five years may still have a future. All the disruptions shall be disrupted!

    Reply
    1. “I do feel its road to profitability is still fuzzy ” – the key is market share before profitability. Opera thinks it has no future anywhere but Africa and specifically Nigeria. So, it wants to win therein.

      Reply
  2. I remember reading that article on opera’s strategy(has it really been two years). Prof is like prophet Elisha who tells the Isrealite king what the Aramean king discusses in his bedroom, such foresight! Its interest for us to see what opera’s competitors will do, especially in the ride hailing sector. They are about to answer the question of how do you compete when tour competitor has more cash to burn than you, and your core business is just a loss leader for them

    Reply
    1. Yes indeed. Tons of money will fight for market share. At the end, customers will smile. We need competition in Nigeria, not just in tech but in everything in our lives. May the best solution take the mantle.

      Reply
  3. It’s an exciting time right now to see a lot of disruption and innovation in various industries in the country. However Prof, please why does the insurance industry seem so elusive or overlooked? I am in the industry even though I came from a totally different one but my studies have helped me understand how important insurance is as a risk management tool as well as the opportunities that abound for investors, innovation. Where have we gotten it wrong or better still, how can we ignite the chain reaction of disruption in our industry?

    Reply

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